Copper's Drop â��Not Sustainable' Near Term, NAB's Knight Says
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Alexandra Knight at National Australia Bank, best forecaster for industrial metals tracked by Bloomberg over the eight quarters, says today by phone from Melbourne.
Copper in London fell 4% to $6,800/ton, lowest price since Oct. 2011
We don't think these lows are sustainable in the near term,” Knight says
Today's drop seen reacting to China's fixed-asset investments, industrial production that trailed estimates, Knight says
Modest growth in U.S., 8% growth in China for this year should remain supportive for demand, Knight says
Eoin Treacy's view On the one hand commodity price declines
can be seen as a medium-term tailwind for the global economy. However, the short-term
outlook probably reflects concerns that the growth potential of the global economy
is being impacted by the Chinese economy growing at below its decade long trend,
continued pressure in Europe and slowing expectations in North America.
Copper pulled back from the $8500 area over the last two months to test the region of the 2011 lows below $7000. It rallied well off today's low but will need to hold above $6750 in order to offset potential for a further test of underlying trading.